I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. I have written for The Times, Daily Telegraph, Express, Independent, City AM, Wall Street Journal, Philadelphia Inquirer and online for the ASI, IEA, Social Affairs Unit, Spectator, The Guardian, The Register and Techcentralstation. I've also ghosted pieces for several UK politicians in many of the UK papers, including the Daily Sport.

Apple's Foxconn Factories Are Getting Better

The New York Times tells us all that the working conditions in Foxconn’s factories that make all of Apple‘s kit are getting better. And indeed they are and this is to be welcomed. However, reading through the article you end up with the impression that this is because of sterling investigative work by various NGOs and the likes of, err, the New York Times. That might well fit their worldview but it’s nonsense I’m afraid. What we’ve actually got here is the straight working out of capitalism and markets: just like Karl Marx himself said would happen.

But in March, unbeknown to Ms. Pu, a critical meeting had occurred between Foxconn’s top executives and a high-ranking Apple official. The companies had committed themselves to a series of wide-ranging reforms. Foxconn, China’s largest private employer, pledged to sharply curtail workers’ hours and significantly increase wages — reforms that, if fully carried out next year as planned, could create a ripple effect that benefits tens of millions of workers across the electronics industry, employment experts say.

As you can see, it’s the meeting, the agency of the employers, that is being credited with these changes. And the piece goes on to argue that this change of heart came from consumer pressure, investigations by NGOs and, of course, the NYT’s own pieces on the same subject.

In 2011, The New York Times began sending Apple and Foxconn extensive questions about working conditions in factories manufacturing Apple products. The resulting articles in late January detailed problems ranging from excessive overtime and under-age workers to sometimes deadly hazards, such as workers’ using a poisonous chemical to clean iPhone screens at another manufacturer, and an explosion in Ms. Pu’s Foxconn plant that killed four workers.

One can almost hear the journalists in New York roaring with pride at how they’ve changed the world.

Yet we can explain all that has happened purely by using Karl Marx and his writings of 150 years ago. Yes, I know he used to write for the NYT too but I don’t think we’ll claim that as a win for the newspaper’s team.

Quite simply, capitalists can only oppress the workers when there are more workers than there are jobs. What Marx called the reserve army of the unemployed. If anyone starts demanding more money or better conditions they can be fired and replaced with one of those unemployed. Workers’ pay and conditions will only start getting better when there is no such army of the unemployed. At which point, capitalists will compete among themselves for access to the labour that allows them to make profits. That competition will take the form of improving wages and conditions in order to attract that labour so that profits can be made from them.

So, what has been happening in China since around the year 2000? That reserve army (in China’s case, the hundreds of millions of underemployed rural peasants) has been progressively exhausted. There just aren’t any more people to pull out of the paddy fields and into the factories. Thus, in order to get the labour they desire factories like Foxconn have been raising wages and improving conditions. And that’s pretty much it.

And we can even prove that it’s not the inspections and the consumer pressure. Manufacturing wages have been improving at 14% a year (yes, after inflation) since 2000. That’s a decade before anyone started to agitate about the working conditions at these factories. Or at least it’s a decade before anyone took any notice of such agitation. So in the absence of our assuming a time machine or two, the agitation isn’t what has been increasing the wages.

It really is quite simple. Once all the available labour was already working in the factories then conditions and wages in the factories would improve. It’s just nothing at all to do with pressure groups, it’s straight, plain and simple Marxist economics.

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